What is Cyber Insurance policy: Today we are living in a world that is driven by technology like never before in the history. Technology and internet have become a part of daily lives right from buying online to socializing online. This has shaped the buyer and seller relationship and brought it a new level where technology is the key to deliver goods and services. With the increased amount of dependency on technology and internet, risk of exposure to cyber-attacks has also become very severe.
What is Cyber Insurance policy
Cyber insurance or cyber risk insurance or cyber liability insurance coverage is an insurance policy that helps the businesses and organizations to cover the risk arising due to threats such as cyber-attacks and cyber extortion. It helps to mitigate the loss occurred due to cyber-attacks, such as hacking, malware, theft, security and data breach etc.
Most commonly, cyber policies cover a business’s liability for a data breach in which the company’s customers’ personal information, such credit card numbers and bank account details, is exposed or stolen by a hacker or other criminal who gains access and control to the firm’s electronic network. The policies cover a variety of expenses associated with data breaches. E-commerce businesses and Banking companies are the major chunk of buyers of cyber security insurance.
Why is it needed?
The fact that technology is ever-changing makes it obvious that business that depends on internet and technology for carrying their operations prone to cyber-attacks despite the deployment of the best cyber security protocols in place. Day by day, the number of cyber-attacks reported by the business houses across the globe is increasing. This tremendous rise in cyber-crimes indicates need for businesses to have their risk of cyber-attack secured by cyber insurance.
What are the costs covered?
- Investigation costs:
These are the costs incurred to investigate into the matters to determine what has happened and how much loss has occurred and other control and remedial measures.
- Legal costs:
Law suits associated with the data breach, release of vital information and intellectual property rights resulting due to cyber-attacks require the companies to pay various costs to the victims.
- Business losses:
Business loss occurred due to cyber-attacks is also covered by many insurance policies.
- Privacy & data notification costs:
In the late 2016, there was a huge cyber-attack in India due to which almost half a million credit/debit cards have been blocked by various banks due to the breach of vital information related to these cards. Such cases compel the banks to notify their customers and other affected parties. Cyber insurance policies include all such costs in their coverage.
Cyber risk insurance is expensive. Though it has been a decade since cyber security insurance first introduced in the market, in countries like India, it is still evolving day by day. Shaped by the kind of cyber-attacks that take place, many companies are running to the insurers to take coverage. However, while going ahead to take policy it is wise on the part of companies to assess the vulnerability to cyber-attacks by availing the services of ethical hackers so that a comprehensive coverage can be taken by listing out all the required costs that would supposedly to be incurred in case of a cyber-attack.